P JThe Power of Change

Thomas M. Ratliff, MBA

SWASFAA PresidentDirector of Student Financial Services

Southwestern Oklahoma State University

Material from N•A•S•F•A•A

and SWASFAAour Regional Association

The PJ Problem

I don’t have any authority

I don’t know what I would change even if I could

I’m not sure what effect changes have

Am I liable if the government doesn’t like my decision?

Statutory Authority

Section 479A of the Higher Education Act provides the authority for the financial aid administrator to exercise discretion known as “professional judgment”

Higher Education Amendments of 1986 broadened professional judgment authority

Areas of Professional Judgment

Dependency Status

Data Elements

Cost of Attendance

FFEL & Direct Loan Eligibility

Satisfactory Academic Progress

Cannot Use Professional Judgment to:

Change a student’s status from independent to dependent

Adjust the EFC directly

Alter the need analysis formula or change table values

Create a new category of costs

Override a Return to Title IV Aid calc.

Cannot Use Professional Judgment to:

Include expenses for post-enrollment activities, such as bar examinations or professional licensing fees, in the student’s cost of attendance

Circumvent the statutory FSEOG selection criteria

Professional Judgment Principles

Must be made on an individual case-by-case basis

Subjective - no answer is regulated as right or wrong

You need justification in your file

You must document your decision

Two Types of Documentation

Decision Justification

• Written request from the student

• Supporting letters

• Paid bills or receipts

• Court papers

• Other related items

Record of Actions

• Decision made and how it was reached

• Actions taken

• School policy

• Name and title of decision maker

Dependency Status: Independent Student Definition

At least 24 years of age by Dec. 31st

Graduate or professional student

Married

Has legal deps. other than a spouse

Orphan or ward of the court

Veteran of the U.S. Armed Forces

Considered independent by PJ

Ask Yourself...

Are there unique circumstances which make it unreasonable to expect the student’s parents to contribute to

educational costs?

Effect of Dependency Override(if student attends a $20,000/year school)

$0.00

$5,000.00

$10,000.00

$15,000.00

$20,000.00

Dependent Independent

Student's Aid

Student's PC

Student's SC

Factors to Consider

GEN-03-07

GEN-03-07

Lists categories of independence in “Background” section

Gives clear guidance on page 2 “Unusual circumstances” defined as

inappropriate to expect parental contribution

You are given “great latitude”

GEN-03-07

ED acknowledges our typically prudent practices and

They applaud us for being here today

GEN-03-07 (cont.)

Practice making dependency overrides on only truly exceptional circumstances

Two examples given:

• parent’s cannot be located

• victims of abuse Reminder it must be case-by-case

GEN-03-07 (cont.)

What does NOT qualify as unusual:

• Parents refuse to contribute

• Parents unwilling to provide data

• Parents not claiming student on taxes

• Student totally self-sufficient

GEN-03-07 (cont.)

Application and Verification Guide (AVG) again recognizes abusive family and parental abandonment as possible factors to consider

Determination must be made annually You must reaffirm decision that parental

contribution is still inappropriate to expect

GEN-03-07 (cont.)

Cannot transfer override between schools Third party written documentation is

generally required

• However, student statement can be accepted if it is all you have and you believe it is sufficient in this case

Factors to Consider

GEN-03-07 Nature of relationship

with parents Student self-support Student’s current

address and places of residence in recent years

Support received from others

Third-party testimony

Parent PLUS loan access

Guardianship

You CANNOT Substitute legal

guardian as parent on FAFSA

Override the dependency status to “dependent”

You CAN Consider

guardianship in dependency override decision

Adjust EFC or COA elements using guardian’s financial information

Data Element Changes:Special Circumstances

Elementary or secondary school tuition Medical or dental expenses not covered by

insurance Unusually high child care costs Recent unemployment of a family member Parent(s) enrolled in college Other changes in a family’s income, assets, or

a student’s status

Special Circumstances

Special circumstances are conditions that differentiate an individual student from a whole class of students

You may not assume the circumstance exists for any group of students even if the group displays similar attributes

It is a violation to generalize conditions or situations for a population of students and make across the board adjustments

Cost of Attendance:Some Potential Adjustments

Dependent Care Expenses

Disability-related Expenses

Cooperative Education Programs

Study Abroad

Loan Fees

Standard Restrictions on COA

If attending less than half time -• Tuition, Fees, Books, Supplies,

Transportation, & Dependent Care Correspondence Study and

Incarcerated Students -• Tuition, Fees, Required Books, &

Supplies

COA PJ Restrictions

Cannot add post-enrollment costs such as professional licensing examination fees

No new cost components

Expenses must be incurred by the student for the student for the period of enrollment

PJ for Tuition and Fees

School policy must state if school uses average or actual tuition and fee charges in budget construction

May use professional judgment to deviate from policy on case-by-case basis

PJ for Room and Board

May use professional judgment to increase or decrease the standard allowance on case-by-case basis

PJ for Books & Supplies

May use professional judgment to increase or decrease the standard allowance on case-by-case basis

PJ for Rental or Purchase of Computer

School decides if, when, and under what conditions it will include computer costs

Any deviation from policy constitutes professional judgment

PJ for Dependent Care Allowance

Adding your school’s standard dependent care allowance to the budgets of qualifying students is not professional judgment

Adjusting the standard dependent care allowance for an individual student is professional judgment

FFEL & Direct Loan Eligibility:Denial & Reduction Authority

The law gives financial aid administrators the authority, under professional judgment, to deny or reduce the amount of a student or parent’s eligibility for a FFEL or Direct Loan.

General Guidelines

The determination must be made on a case-by-case basis

The reason for the action must be documented and provided in written form to the student

The school must not discriminate on the basis of race, national origin, religion, sex, marital status, age or disability status

Possible PJ Situations

Borrower’s unwillingness (not inability) to repay the loan

High debt burden

Satisfactory Academic Progress: Compliance Requirements

Student Eligibility, 668.32(f) and 668.34: student must be making satisfactory progress in his or her course of study according to the school’s satisfactory progress policy, contains other procedural requirements and basis for PJ

Administrative Capability, 668.16(e): school must establish, publish, and apply reasonable standards for measuring whether a student is maintaining satisfactory progress

Student Consumer Information, 668.42(c): school must disclose progress standards and procedures to re-establish eligibility

Required Qualitative SAP Policy Components

Same as or stricter than federal policy Consists of grades, work projects

completed, or comparable factors that are measurable against a norm

If program is >2 academic years, student must have a GPA of “C” or better at the end of the second year, or have an academic standing meeting graduation requirements

Required Quantitative SAP Policy Components

Maximum time frame in which a student must complete the educational program

Must not exceed 150% of the published length of the educational program

Maximum time frame divided into increments

Increment may not exceed lesser of one academic year or 1/2 the published length of the program

Required Quantitative SAP Policy Components

Policy must include work schedule showing minimum that must be completed at the end of each increment in order to complete program within maximum time frame

At the end of each increment, academic progress is evaluated. At a minimum, this must occur at the end of each year.

Additional Required SAP Policy Components

Must include specific policies defining effect of noncredit remedial courses and ESL courses

Must include specific policies defining effect of course incompletes, withdrawals, and repetitions

Transfer Students, Second Degrees, and Major Changes

No specific policy requirements• Must decide how transfer credits will

be treated• Must decide how all three groups will

be treated regarding the maximum time frame

• It’s good practice that satisfactory progress policy clearly addresses how these students will be treated

SAP Appeals and Re-Establishing Eligibility

Policy must include procedures for a student to re-establish that they are making satisfactory progress or to appeal a suspension

Who will make appeal decisions?

• Committee vs. individuals

When and how often will appeals be considered?

SAP Probation

Period of time during which student is considered to be making satisfactory progress despite failure to meet one or more of policy’s standards

School’s option to include probation as part of policy

Some schools have an “automatic” probation, others use it on a case-by-case basis

PJ vs. Policy

PJ is only exercised when a decision is made that is contrary to policy or is not specifically addressed in policy

If the situation is addressed in policy and you act in accordance with the policy, that is NOT PJ

Why is this distinction important?

• Because PJ must be a case-by-case review and documentation is required

P JThe Power of Change

Be involved. Be a voice. Make a difference.

Thomas M. Ratliff, MBA

SWASFAA President